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Introduction & Market Context
FormPipe Software (ETR:SOWGn) AB (STO:FPIP) presented its Q2 2025 results on August 19, 2025, highlighting a major strategic shift with the planned divestment of its Public business segment while reporting improved financial performance. The company’s stock is currently trading at 29.0 SEK, down 2.68% from the previous close of 29.8 SEK, as investors digest the implications of this significant restructuring.
The presentation revealed FormPipe’s decision to divest its Public business segment for up to SEK 850 million, allowing the company to focus more intensively on its Lasernet business, which specializes in document and customer communication management software. This strategic pivot comes as the company continues to show margin improvement despite facing currency headwinds.
Divestment of Public Business Segment
The most significant announcement in FormPipe’s Q2 presentation was the planned divestment of its Public business segment. According to the transaction details, the purchase price is structured to include up to SEK 850 million, with SEK 775 million to be paid in cash at closing, SEK 50 million through a loan note payable in 2029 (with 4.25% annual compounding interest), and a potential additional SEK 25 million contingent on certain investment return metrics.
As shown in the following transaction timeline:
The divestment was announced on August 18, 2025, with an Extraordinary General Meeting scheduled for September 17, 2025, and the expected closing in Q4 2025. The company has secured voting undertaking agreements from major shareholders representing 20% of the company’s votes.
The transaction is subject to several conditions, including the successful transfer of 90% of contracted revenue from FormPipe Public’s Swedish customers and customary regulatory approvals.
Quarterly Performance Highlights
FormPipe reported solid financial results for Q2 2025, with net sales reaching 140 MSEK, up from 132 MSEK in the previous period. The company’s EBIT improved to 12 MSEK from 8 MSEK, excluding 10 MSEK of one-off costs related to the Public segment divestment.
The company’s key financial metrics for the quarter are illustrated below:
Recurring revenue continues to be a strength for FormPipe, representing approximately 80% of net sales. However, Annual Contract Value (ACV) intake was 6 MSEK, down from 12 MSEK in the comparable period, though the company described this as "stable."
The detailed financial breakdown shows continued growth in SaaS revenue (+17%) and an improvement in EBITDA margin to 21% from 19% previously:
FormPipe’s recurring revenue growth has been a consistent bright spot, with the company reporting:
The recurring revenue has reached 443 MSEK on a rolling 12-month basis, representing 8% year-over-year growth and a CAGR of over 10% since 2014. Importantly, this recurring revenue now covers more than 105% of fixed operating costs, providing stability and reducing business risk.
Lasernet Business Focus
With the divestment of the Public segment, FormPipe is positioning Lasernet as its core business going forward. The presentation provided detailed insights into this business area, which serves customers across more than 60 countries.
Lasernet complements ERP and banking systems by generating, distributing, and archiving business documents from various data sources. The business has established strong positions within the Microsoft (NASDAQ:MSFT) Dynamics 365 and Temenos ecosystems, with sales and implementations delivered through a global partner network.
The company reported that Lasernet secured 12 new deals in the Dynamics ERP space during Q2 2025. FormPipe’s management noted that they "start to see margin improvement thanks to our Essential project and cost focus" in the Lasernet business.
The ACV performance for the quarter showed a stable result despite some churn:
Lasernet contributed +4.5 MSEK to the total ACV of +6 MSEK, while Public added +1.5 MSEK and other segments +0.3 MSEK. There was also a slight positive FX effect of +3 MSEK, following a large negative effect in Q1. The company’s outgoing ARR reached 458 MSEK, representing a 6% increase compared to the previous year.
Financial Targets and Outlook
FormPipe reaffirmed its financial targets for the 2021-2025 period, which include:
The company aims to achieve 10% average annual revenue growth through 2025, with recurring revenue comprising 70% of total revenue by that time. FormPipe is also targeting a gradual improvement in EBIT margin to exceed 20% by 2025, while maintaining its dividend policy of distributing more than 50% of net profit over time.
Looking ahead, FormPipe highlighted four key takeaways from its presentation:
1. The divestment of the Public segment
2. Positive margin development
3. A focused strategy centered on Lasernet, building from its strong market position
4. An upcoming Capital Markets Day in late November, where the company will likely provide more details on its post-divestment strategy
The company’s strategic shift represents a significant transformation that will allow FormPipe to concentrate its resources on the Lasernet business, which has demonstrated strong growth potential and improving margins. Investors will be watching closely to see how this more focused approach impacts the company’s ability to meet its financial targets through 2025 and beyond.
Full presentation:
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